WHY SELL MY MINERAL RIGHTS?
The decision to sell mineral rights depends on your unique situation.
Below are some good reasons to sell mineral rights.
- Eliminate management responsibility and risk. Like all investments, mineral rights take time and energy to manage and come with risk of financial loss. Maybe you don’t mind dealing with lease offers or bearing the costs and risks of production. But will your children or other heirs want to do it?
- Receive a lump sum of cash. It makes sense to sell mineral rights when you’re ready to turn this investment into a liquid asset you can use for other things. Dividing up mineral rights among multiple people can sometimes complicate both the management of the asset and family relationships. In this case, selling the rights and leaving the proceeds to your heirs might be the smartest thing to do.
- Immediate Payment. Get value for your mineral rights now.
- Tax Considerations. When you lease your mineral rights, the payments you receive are taxed as income. These payments include royalties as well as payment you received for giving access to the land for mineral exploration. When you sell your mineral rights, as long as you have owned these mineral rights for more than a year you can be considered for long-term capital gains. Please consult with a certified accountant.
- 1031 Exchange. If you have owned mineral rights for at least one year, you can opt to do a 1031 exchange. If you sell your mineral rights and reinvest the proceeds in another property (such as a house) within 90 days, you will not pay capital gains taxes until you sell the property you bought with the proceeds. Please consult with a certified accountant.
MAKING SENSE OF YOUR MINERAL OPTIONS
While Miller Energy Group focuses primarily purchasing mineral rights, we can also lease your rights if that’s the right option for you.
Mineral owners are sometimes approached by oil and gas companies – operators – asking them to sign a lease agreement. They offer the owner an amount of money to allow them to do this for a specific term limit, plus a percentage of the profits if they find minerals they can extract.
Take your time and review the offer when you receive a lease proposal. If you haven’t been approached by a company but are interested in leasing your mineral rights, please contact us and we would be happy to look into your lease opportunity.
What to Expect When Selling Mineral Rights to Miller Energy Group
When you decide to sell your mineral rights, we walk you through every step of the process and explain it all to you. We know this is an important asset to you, and we want you to be fully informed at every step. When selling to The Miller Energy Group, we will be 100% transparent with you every step of the way.
First, we will evaluate your mineral rights/property and get a better understanding for where this property is located and the features it possesses.
We will then make an offer to buy your mineral rights and review it with you to ensure that it is a deal you can feel good about. We work to get the best price possible for your property.
Once we have agreed on the terms of the sale, we will send you a contract for signature. After the title research and proper steps towards closing, we remit a payment for the amount of the sale and record the deed in the county courthouse.
Mineral Title Search for No Extra Cost
Not all families have their mineral rights organized or passed down correctly from one generation to the next. If you are interested in selling or leasing your mineral rights, we will do the title search for you at no additional cost.